The Org is Flat

But what does it mean in practice? What would work in a flat organization mean as far as work is concerned, and what would it mean to the way the organization is controlled?

To understand this, you have to understand the opposite -- that is, why are companies that are not flat organized that way, and what is it that they do differently. The purpose of hierarchy relative to a business function is to roll up work to different levels of operations so that objectives at the core of the business can be translated into several actions needed to be taken by several people. To trivialize this in an example, supposing the CEO says -"Make 10 billion", this might break up into making 4 billion by selling new stuff that the company already makes, 3 billion more by making & selling something new, 2 billion by selling services around the companies products, and 1 billion by selling off some part of the business/assets that the company wants to exit.

This translates to several actions for other people in the company. Some people have to figure out how to sell more of the same stuff, some have to figure out what new stuff to make, some have to sell services that have already been defined, and maybe then new ones, and some people have to get the best possible price for whatever asset that company decides to cell.

In a hierarchical organization, one or more people reporting to the CEO would be in charge of one or more of these high level actions, and could then further divide the high level action into sub actions.  Relative to making new stuff for example, one person may be in charge of making new gadgets, and the other may be in charge of making new doozers. They might divide the 3 billion between themselves as 2 billion by making new gadgets and 1 billion by making new doozers. The person making new gadgets may decide to make five new things.  Then someone would need to figure out how the thing needs to be made.  It would need to be designed, and the materials required would need to be obtained, the tools required also, and there would need to be people to make them for a certain amount of time. Once made, some amount of paperwork would be needed. The new thing would then need to be advertised and sold through appropriate channels.

All this can be expected to take a reasonable amount of coordination between people doing different tasks, and there would need to be a reasonable way to get these people to work together efficiently in order to make the target 10 billion. This is where the hierarchy comes in in order to provide a mechanism for coordination across resources in order to satisfy organization objectives.

How would this scenario play out in a flat organization?  Consider the differences. The flat organization needs to have more people performing lower level functions in direct contact with the next level. The structure may no longer be CEO - gadgets chief - thing chief - thing maker. It may be  CEO - thing chiefs. That is, the the CEO may directly to speak to multiple thing chiefs to tell them what to do instead of speaking to a single gadgets chief. Therefore, in this scenario, some key changes need to happen. The CEO may need to directly breakdown the goal to the next level, as the decisions related to that may no longer be made individually or collectively by the people at the next level. This illustrates the movement of responsibility across levels when the intermediate ones are not available. 

So why then is the flat organization attractive to anybody, if it results in each level having to do more work? The answer lies in the speed of communication and the retention of intent. If A says something to B and B say something to C and so on, as most of us know from this game at children's birthday parties, the last person may say something completely different than what the first person said. Also, the time difference between when the first person said it and when the last person heard it is obviously proportional to the number of people in between. Therefore, while it calls for a different way of working, the flat organization can be much more responsive and focused than a hierarchical organization if it masters the art of absorbing functions into each layer successfully.

Does this mean each person has a lot more to do? Not necessarily. Each person would have a larger range of things to do than in a hierarchy, but if resourced correctly, this wouldn't necessarily translate into long hours. However, if done wrong it would definitely end up creating a place full of overworked and stressed employees.

Hearing that an organization is flat by itself does not tell you the whole story -- you have to know how it works from the way in which the structure contributes to achieving the goals of the company.